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2008 new-house sales dive by nearly a half

THE number of sales of new houses, excluding those designated for relocation, plunged by nearly half in 2008 from a year earlier in ten major cities across the country, the latest industry report reveals.

New-home sales in first-tier cities including Beijing, Shanghai, Shenzhen and Guangzhou, as well as the second-tier cities of Tianjin, Shenyang, Chengdu, Wuhan, Xiamen and Changsha, plummeted 46 percent last year compared to 2007, according to statistics released by real estate consultancy company DTZ.

"Across the whole country, the volume of new homes sold probably dropped 20 percent," said Alan Chiang, the head of residential operations for DTZ in China. "Destocking will therefore be the priority for the country's real estate developers in 2009."

DTZ predicted that inventories in first-tier cities will be reduced at a comparatively faster rate compared to those in second-tier cities, given that corrections in first-tier cities began earlier. It would take first-tier cities roughly six to seven months but 12 to 16 months for second-tier cities to take up the reserve, the company said.

In Shanghai's residential sales market, both transaction volumes and prices dropped in the last quarter of 2008 amid rising uncertainties on both the domestic and global economies. A total of 1.74 million square meters in new homes was sold in the city during the period, down 7.58 percent from the third quarter. Prices, meanwhile, withdrew 5.06 percent on average to 12,690 yuan (US$1,858) per square meter, DTZ said earlier.

The high-end market (above 20,000 yuan per square meter) was more affected. More than 220,000 square meters of space were traded during the quarter, a plunge of 19.53 percent from the July to September period.

The average price fell 3.13 percent to 31,478 yuan per square meter.


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